How Do You Stop Offering A Service Clients Didn't Need Originally But Now Expect?

Executive Summary

Most planning firms pride themselves on providing great service to their clients, which often involves going to great lengths to satisfy client requests. Yet in reality, it seems that a lot of our intensive service efforts are less a function of what our clients asked for, and more about what we thought we should offer them. Perhaps a common example is something like quarterly performance statements; most firms say their clients "want" them, yet in truth most firms started sending them to clients on a quarterly basis before ever asking and surveying their clients about whether it was what they really wanted and needed. Now, of course, clients have an expectation of receiving them regularly, and weening them off of a currently provided service can be difficult. But in the end, did clients really need that service, or do clients only expect because we created that expectation for them, but now will feel like we’re taking something away to change it?

The inspiration for today’s blog post comes from the discussions over financial-planning.com, hosted by Bob Veres, about what Bob calls our "hidden assumptions" – the things that we assume our clients want or need that we provide, that are constraining the growth and success of our practice, but in the end aren’t what our clients really needed, and instead are just what we assumed they want.

This is a theme I (and Bob) have touched on in the past, in thinking about whether we give clients what they need, or what we think they want… and whether we have a process to identify the difference. But the examples in the latest Veres conversation – the clients who receive quarterly statements, or who get quarterly meetings with their advisor – struck me because for most firms, who already do this kind of intensive activity, the challenge now is not just whether clients really "need" those services or not, but the reality that because they’ve been receiving them, it may be even harder to eliminate the service than it would have been to never offer it in the first place. In the absence of the service, clients simply accept what they receive. But once the service has been delivered, and we’ve created that expectation… now it feels like we’re taking something away! How do you put the genie back in the bottle?

I suppose on the one hand, this simply means we need to be more careful about what we offer in the first place. Being too extravagant in the services we give clients – which many firms lavish on their early clients, when the firm is small and has the time and just wants to reach a critical mass – becomes a problem as the firm grows, when it’s difficult to take back. By the time we start really thinking about the long-term implications of various services we offer, we’re already at the point that it feels like we’ll have to take something away from clients.

On the other hand, it’s my impression that often we also have an excessive fear that anything we take away from clients will result in mass upset and a client exodus, when realistically that’s probably not the case at all. Examples include those common ones like how often we meet with clients, and how frequently we provide a copy of account statements. Will your clients really fire you if you don’t mail them a copy of a statement every three months that they can already look up online any time of day or night that they want? If that one paper statement you mail is the difference between retaining or being fired by the client, maybe that’s actually the sign of a bigger problem?!

As I highlighted in my prior blog post on this, ultimately I think we need to get a lot better at asking our clients what they really need, rather than just assuming we know what will make them happy. But there really is a lot of rather service-intensive "stuff" that we do as financial planners, that I’m not certain we’ve ever spent much time asking our clients about. It ranges from the quarterly statements so many of us mail, to the frequency of our (face-to-face) meetings, to how often we update their financial plans, to whether our financial plans are simply a page of recommendations or the entire financial planning "tome" that we deliver to them. In point of fact, it would seem that the majority of the heavy lifting work we do as planners involves a series of repetitive steps and efforts we take on behalf of each and every client, over and over again… even though we rarely ever ask them up front if it’s what they actually wanted and needed in the first place.

It would be pretty embarrassing for a lot of firms if it turned out we didn’t actually need to be doing all this work. It would mean our practices actually are capable of being a lot more efficient – and profitable – than we realize, if we can get out of our own way and focus on what clients really need, and not just what we assume they need. Do you ever try to explore the difference between the two with your own clients?

So what do you think? Is it possible we’re delivering a bunch of services that our clients don’t actually need? Do our clients state that they need these things now because they really do, or because we "told them" they need those services and created the expectation by delivering it first, and asking questions later? Could your practice be a lot more efficient than you realized? What are you offering to your clients that maybe you don’t need to be providing them after all?